Painful, but HSBC has got it right on succession

Friends and foes: Geoghegan, right, may feel ill-used but Robertson actually did him a favour

In July last year, I met Mike Geoghegan at HSBC headquarters at Canary Wharf.

His office was, as you might expect of the chief executive of Europe's biggest bank, substantial. At one end was a large desk with chairs, and at the other, sofas and a table. One wall was covered by a giant plasma screen showing HSBC's operations worldwide. The numbers kept changing, and every so often Geoghegan would press a button on a remote and alter the picture. He could, he said proudly, "bore right down" to any branch in the world and see how it was performing.

He had a restless energy. He talked quickly, about how efficient HSBC was, how it used up-to-the minute technology, how it had avoided the state bailout, how its global reach was huge and extending all the time, how it was poised to cash in on opportunities in the emerging markets, especially China.

A few months later, he upped sticks and went to Hong Kong. No matter he said to me then — he could do his job from there. Remember how he'd showed me that screen in his office? He could run HSBC from anywhere.

Now he's gone, his place taken by Stuart Gulliver, the bank's head of investment banking, and Doug Flint, the finance director, has leapfrogged Geoghegan to become executive chairman.

Geoghegan did not fit the chairman's job spec drawn up by Sir Simon Robertson, the senior independent director, who was charged with finding a successor to chairman Stephen Green after he quit to join the Government.

Geoghegan and Robertson are very different. The former is Irish, fiery, 37 years at HSBC, mostly at the sharp, retail end. Robertson is an old Etonian, a networker, ex-chairman of Kleinwort, present chairman of Rolls-Royce.

But although Geoghegan would have liked to be asked, he knew in truth that the post of HSBC chairman was not for him. I've also been to Green's office in the HSBC tower. It's tiny, about a third the size of Geoghegan's.

Green's role was that of a full-time figurehead, meeting and greeting, being a roving ambassador for the bank, and keeping the board sweet. Geoghegan managed the entire operation, even devising strategy, holding meetings with executives — who all reported to him — to challenge and motivate them and, when needed, give them a hard time. He could play with his remote and check on any aspect of the bank's activities, and if he didn't like what he saw, pick up the phone and speak to the staff responsible.

No, making the switch to chairman, to the smaller room and the lesser brief, would have driven him mad. HSBC's succession may have seemed chaotic and painful, but the right result has been achieved for everyone concerned.